Time to Fix Public Works Contractor Law

At Issue

By Elissa Frank, NJBIA Vice President of Government Affairs On May 29, 2024

Sometimes the best intentions go awry – and that’s what happened five years ago when a state law aimed at increasing apprenticeship training opportunities unintentionally shut out thousands of small businesses from bidding on public works contracts.

Now, with billions of federal dollars headed to New Jersey for public infrastructure projects, it is more important than ever for the Legislature to correct this.

In 2019, New Jersey’s Public Works Contractor Registration Act was amended to require contractors to participate in an apprenticeship program to bid on public contracts. To satisfy this requirement, contractors can choose to sign a collective bargaining agreement with a trade union that maintains an apprenticeship program, join an association that maintains apprenticeship programs, or create their own program. All programs must be approved by the U.S. Department of Labor. 

While the 2019 amendments were intended to increase training opportunities in the building trades, the unintended consequence has been to severely limit the ability of small businesses to bid on public works contracts unless they have the resources to participate in an aggregated apprenticeship program. 

After the apprenticeship program requirement was created in 2019, more than 1,900 potential contractors were initially denied bidding on public works contracts in 2020, with most of them losing out on a contract for failing to participate in an apprenticeship program. Simply put, it does not make sense to require a one- or two-person family business to participate in an apprenticeship program when they will never grow beyond their small family operation and hire anyone that needs apprentice training.

Since 2019, the number of registered contractors has dropped from over 10,000 to approximately 6,400. With billions of federal dollars available for New Jersey public infrastructure projects and fewer state registered public works contractors eligible to bid on them, the bidding process loses the robust competition it needs to deliver projects at a lower cost to taxpayers.

Thankfully, the Legislature is considering legislation that would remove key registered apprenticeship program requirements needed to bid on public work contracts and set apprenticeship standards for prevailing wage projects. This is a positive bill that, once signed into law, will benefit both business, labor groups, and taxpayers. 

NJBIA is working to get this bill across the finish line because New Jersey needs to do better for small businesses. 

To access more business news, visit NJB News Now.

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